In December 2019, Sir Donald Brydon published an Independent Review of the quality and effectiveness of audit in the UK. In the report (page 5) Sir Donald Brydon concludes that “Audit is not broken but it has lost its way and all the actors in the audit process bear some measure of responsibility.” He makes a number of recommendations that include:
1. A redefinition of audit and its purpose;
2. The creation of a corporate auditing profession governed by principles;
3. The introduction of suspicion into the qualities of auditing;
4. The extension of the concept of auditing to areas beyond financial statements;
5. Mechanisms to encourage greater engagement of shareholders with audit and auditors;
6. A change to the language of the opinion given by auditors;
7. The introduction of a corporate Audit and Assurance Policy, a Resilience Statement and a Public Interest
Statement;
8. Suggestions to inform the work of BEIS on internal controls and improve clarity on capital maintenance;
9. Greater clarity around the role of the audit committee;
10. A package of measures around fraud detection and prevention;
11. Improved auditor communication and transparency;
12. Obligations to acknowledge external signals of concern;
13. Extension of audit to new areas including Alternative Performance Measures; and
14. The increased use of technology.
The Report can be downloaded click here